UK won’t agree a Brexit plan this week

Despite increasing pressure to articulate the U.K.’s position, Theresa May’s top Brexit team will not agree its preferred future trade and customs relationship with the European Union this week, according to a senior U.K. official familiar with negotiations.

Ministers on May’s Cabinet sub-committee on Brexit are set to meet on Wednesday and Thursday to start thrashing out a united position on the final “end state” they want to negotiate with the EU. While this week’s meetings have been portrayed in the press as a make or break moment, those on the inside insist this is not being viewed as “decision week” internally.

The meetings come after weeks of sustained criticism of the prime minister, largely driven from within her own party, for her failure to set her own direction on Brexit, culminating in a series of interventions from MPs on both sides of the Tory divide and a hastily issued clarification from No.10 Downing Street that it was not watering down its exit plans.

Angry Conservative MPs on Tuesday challenged government Chief Whip Julian Smith over the prime minister’s handling of the U.K.’s exit, demanding to know why she had ruled out any membership of a customs union with the EU before this week’s crucial Cabinet committee meetings, one senior Tory MP said. “It’s not good enough,” the MP said. “Why couldn’t she have waited until the committee had its say?”

The delay means the British government is likely to have less than a month to make its case to Brussels.

The Cabinet’s timetable is also likely to infuriate EU leaders, who have ramped up pressure on the U.K. to set out what it wants the future relationship to look like, and have warned failure to do so will jeopardize the entire exit negotiation and leave Brussels little choice but to set out its own hard lines without the chance to consider Britain’s proposal.

The delay means the British government is likely to have less than a month to make its case to Brussels before Michel Barnier receives his formal negotiating instructions from EU leaders, expected at the next European Council on March 22-23.

According to the senior official, there will be no final agreement on the future relationship until at least next week — and possibly even later this month. No deadline has been set but officials expect a decision in the coming weeks, the insider said.

A conclusion on the future customs setup with the EU after Brexit — which No.10 Downing Street has insisted will not be any form of customs union but a “new partnership” or “streamlined arrangement” instead — is even further away from being agreed, according to the official, who spoke on condition of anonymity.

The senior government insider said it was now looking ambitious to even agree the terms of the proposed transition period in time for the March EU summit, which is many businesses’ deadline, after which point they say they will trigger Brexit contingency plans.

In an open letter sent to the prime minister Wednesday, the president and the director general of the British Chambers of Commerce, Francis Martin and Adam Marshall, make what they call “an urgent appeal for clarity.”

“Businesses need those elected to govern our country to make choices — and to deliver a clear, unequivocal statement of intent,” the letter says. “The perception amongst businesses on the ground, large and small alike, is one of continued division. Even amongst the many optimistic, future-oriented firms — those who see opportunity in change — patience is wearing thin.”

One sticking point at a time

The prime minister wants to agree a transition — which the U.K. government prefers to call an “implementation period” — lasting “around two years” at the March summit before moving onto the outline of a future relationship, which both sides hope to tie up by October.

U.K. government insiders remain hopeful that a deal can be struck but “predictable differences” between the U.K. and the EU27 remain, according to one Cabinet minister familiar with the state of the negotiations.

A government spokesperson said they remain confident the negotiations would continue to progress: “The Secretary of State [David Davis] has made clear that he is confident an agreement can be reached on the implementation period in time for the March Council.

City workers walk past the Bank of England in London | Christopher Furlong/Getty Images

“It has also been made clear that Britain will be leaving the single market and customs union, and in our future partnership paper we have set out two approaches to our customs arrangements with the EU.”

U.K. government officials and ministers do not expect the main sticking point in the negotiations to focus on the transition but on the “nitty gritty” of the proposed future relationship and, in particular, how to reconcile London’s stated aims of frictionless trade with Europe, no hard border in Ireland, and a departure from the EU’s customs union. Consequently, this is where May’s team will focus their discussion in the meetings this week.

Good progress has been made clarifying the broad outlines of the U.K Cabinet’s “end state” proposal, according to the senior government official, but there remains a series of issues that need to be picked off one by one.

While the expectation among those involved in the process is that more meetings will be needed in the coming weeks to fully finalize the government’s position, other Whitehall officials insisted on Tuesday night the progress of the meetings could not be judged in advance. All those familiar with the process also expect good progress to be made this week even if the final decision is not agreed.

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